The trajectory of Horizen has been a path of changes and updates aimed at becoming the most secure, private, and scalable blockchain, where any user, developer, and enthusiast can access the right tools and environment to get the benefits of the web3 ecosystem.
By making the EVM EON a reality and shifting to a decentralized governance system (DAO), what are the next steps and towards which direction and new challenges is Horizen heading?
While it is true that the milestones marking this project have provided the use of tokens with affordable fees, quick transactions, interoperability for dApp development, and updates to the infrastructure, as well as the execution of projects through a system of proposals and financing from a decentralized treasury where the community participates and the holders decide which projects are undertaken, technology continues to advance.
That’s why Horizen plans to become an important part of the Web3 system of modular and composable blockchains this year 2024! 🎉
But first, let’s outline a few points to provide context and recognize the significant step this project is transitioning through.
What is a Modular Blockchain?
Let’s imagine a modular blockchain as a large LEGO set, where each piece has a special function. In a traditional or monolithic blockchain, each block in the chain does everything: it processes transactions, ensures their security, and keeps the ledger up to date. It’s like having a single LEGO piece trying to be the entire set by itself.
In a modular blockchain, the work is divided. You have different pieces or modules for different tasks. One module might be really good at processing transactions quickly, another might focus on keeping those transactions secure, and a third could be excellent at storing all the information so it’s easy to verify. Each of these modules is like a specialized LEGO piece that does its job very well.
This setup can make the blockchain more efficient, scalable (meaning it can handle more transactions as it grows), and flexible because you can update or improve modules without having to rebuild the whole system.
What is Composability in Blockchain?
Composability in blockchain refers to the ability to combine and interconnect different blockchain protocols, smart contracts, and decentralized applications.
It enables developers to leverage existing building blocks and protocols to create new applications and services without starting from scratch. Composability works off three principles: modularity, autonomy, and discoverability.(Ethereum, 2023)
A composable blockchain is like a big box of LEGO bricks for creating blockchain applications. You can take the pieces you need and put them together any way you want to create something totally unique and useful!
Relationship between Composability and Modularity
Composability and modularity are closely related concepts, both aimed at enhancing flexibility, interoperability, and scalability in blockchain architectures. A modular blockchain is inherently composable, as its design allows for the combination of different modules to create new applications or services. On the other hand, a composable blockchain often achieves its composability through modularity, by breaking the system down into components that can be combined and reused in various ways.
In summary, a composable blockchain emphasizes the ability to assemble different components to create new applications, while a modular blockchain emphasizes the separation of functionalities into specialized modules to improve performance and flexibility.
Modularity addressing the Blockchain Trilemma
The blockchain trilemma refers to the challenge of achieving a balance among three critical aspects of blockchain technology: security, scalability, and decentralization. Traditionally, it has been difficult for blockchain platforms to optimize all three simultaneously, as improvements in one area often come at the expense of others. However, a modular blockchain architecture offers a promising approach to addressing this trilemma by providing more flexibility and specialization.
- Flexibility: Modularity allows platforms to adapt and optimize different modules independently, depending on the desired balance between security, scalability, and decentralization enables platforms their architecture to meet specific use cases or requirements.
- Continuous improvement: With modular architectures, improvements can be made to individual modules without disrupting the entire system. This facilitates ongoing optimization and innovation, helping to address evolving challenges and achieve a better balance among the three aspects of the trilemma over time.
To provide an example of modular cases, let’s take Ethereum and its layer 2 scaling solutions designed to enhance network scalability, efficiency, and flexibility. Two of the most notable proponents of this approach are Optimistic Rollups and Zero-Knowledge Rollups (ZK Rollups). These technologies represent a significant step towards a modular structure, each addressing different aspects of the blockchain trilemma. Horizen has its sights set on ZK Rollups, which, unlike Optimistic Rollups, utilize zero-knowledge proofs to verify transaction validity off the main chain. This enables swift and secure transaction verification without compromising privacy or security.
ZK Rollups for Ethereum assist in scaling by bundling thousands of transactions (TXs) into a single batch. Moreover, they employ zero-knowledge proofs to swiftly verify these batches without disclosing the details of individual transactions.
How do ZK-Rollup batches work?
- Batch Transactions with ZK-Proof: Transactions are grouped, and a zero-knowledge proof (zk-proof) is generated for the batch. This proof can validate the accuracy of the entire batch without revealing the details of any individual transaction.
- Publishing to Ethereum:
- The batch, along with the zk-proof is compressed and sent to the Ethereum network.
- Account states (e.g., balances, smart contract states) affected by these transactions are updated on Ethereum.
- Ethereum accepts the new state of the ZK Rollup once the zk-proof is verified (Proof of Validity), ensuring that all transactions in the batch are valid.
The Concept of Validity Proof
The Verification Process: The validity of batch transactions is verified through a calculation known as zk-SNARK (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) or zk-STARK (Zero-Knowledge Scalable Transparent Argument of Knowledge). This is done on the ZK-Rollup layer.
Smart Contract Execution on Ethereum: Once the calculation is complete, the result (the proof) is verified on Ethereum by executing a smart contract.
Problem Detected: Validity Proof Verification
The verification of the validity proof encounters the following issues:
- Competition for resources: The calculation of the validity proof competes with other activities on the Ethereum network, such as transactions and smart contract executions.
- High computational cost: Verifying the ZK validity proof on Ethereum requires significant computational resources, making it an expensive operation.
Horizen has researched and compiled the ZK Rollup Validity Proof Verification costs on Ethereum for 2023, and it is significant. This cost will go up by 10x over the next 5 year if nothing changes. (Versluis, 2023)
Faced with this issue, Horizen could ask the following question: How can one make use of ZK-Rollups, leverage their benefits on the Horizen chain itself, and at the same time reduce verification costs?
Quick answer: Add another layer.
Due to the computational intensity and cost of verifying ZK validity proofs on Ethereum, Horizen would add another layer to its blockchain stack. This new layer would be modular and composable, designed to handle such operations more efficiently and cost-effectively, relieving pressure on Ethereum’s resources and improving overall scalability.
✨ New Horizen, a Modular Solution ✨
A new system. Instead of sending the batch validity proof directly to Ethereum, as is currently done, the ZK-Rollup package would send it to a new system called “New Horizen.”
Custom methods. New Horizen aims to accommodate the diversity of ZK Rollups by providing custom methods for verification, acknowledging that different rollups use different cryptographic techniques.
Verification and Attestation. Once New Horizen uses the relevant ZK cryptographic methods to verify the proof, it issues an Attestation. This certification is then sent to the ZK Rollup’s smart contract on Ethereum, indicating that the transaction batch has been verified and can be accepted.
Simplifying the Process
- Attestation on Ethereum: With the attestation published on Ethereum, the network accepts the transaction data. It is crucial to note that this eliminates the need for Ethereum to perform the computationally heavy validity proof verification.
- Requirements for this system to work:
- The ZK-Rollup contracts on Ethereum must be updated to recognize and accept certifications.
- The ZK-Rollup package must be compatible with the proof verification chain (New Horizen).
Technical Foundations Required
- A new blockchain framework: The New Horizen system will be built on the Substrate framework, a flexible platform for developing blockchains. Horizen’s existing Proof of Work (PoW) blockchain will transition to a new Proof of Stake (PoS) blockchain, a proven system that can be easily modified to add ZK proof capabilities.
- Development of Horizen: Horizen will be responsible for creating the necessary ZK primitives (basic components of Zero-Knowledge Proofs) and integrating customized ZK-Rollup solutions.
This new approach proposed by New Horizen shifts the heavy lifting of verifying accumulated ZK transactions from Ethereum to a specialized blockchain based on Substrate. By doing so, it aims to streamline the verification process using certifications, thus potentially reducing the computational load on Ethereum and speeding up the acceptance of batch transactions. This method acknowledges the diversity of cryptographic methods used by different ZK-Rollups and proposes a more efficient unified blockchain framework for their verification.
Benefits for Users
The implementation of New Horizen offers several potential benefits for users, developers, and even the chain itself, especially in terms of scalability, efficiency, and economic sustainability. Some of these benefits include:
- Reduced Transaction Costs
By shifting the computational burden of validating proofs away from Ethereum to the New Horizen system, a reduction in transaction costs is expected. - Increased Transaction Speed
Using New Horizen to verify proofs can make the process more efficient, resulting in faster transaction confirmations. - Security
Although the system moves verification away from Ethereum, it does not compromise security. The use of Zero-Knowledge Proofs ensures that verification is conducted without revealing sensitive transaction information, maintaining user data privacy and security. - Interoperability and Flexibility
Since New Horizen is designed to support different types of ZK-Rollups through customized verification methods, it offers a flexible and interoperable platform for various applications and services. This opens the door to greater innovation and adaptability in the cryptocurrency ecosystem. - Simplified Verification Process
By centralizing proof verification in a specialized chain, the process is simplified for developers of decentralized applications (dApps) and Ethereum-based services, allowing them to focus on enhancing user experience and developing new functionalities. - Reduction of Gas Fees
A direct benefit of reduced congestion and improved efficiency is the potential decrease in gas fees for users. By offloading intensive computation to “New Horizen,” resources on the Ethereum network are freed up, which could lead to a reduction in gas costs, making transactions and interaction with decentralized applications (dApps) more economical. - Increased Scalability
New Horizen proposes a solution that significantly increases the scalability of the Horizen ecosystem by allowing more transactions to be processed in a shorter period, enabling Horizen to achieve higher throughput (number of transactions per second) without compromising security or decentralization. - Encouragement of Innovation
With this implementation, Horizen can become even more fertile ground for innovation. Developers and entrepreneurs might feel more incentivized to build on Horizen, knowing that scalability limitations are being effectively addressed. This could result in a richer and more diverse ecosystem of dApps and decentralized financial services. - Maintenance of Security
Despite the outsourcing of certain functions, New Horizen is designed to maintain the integrity and security of transactions and data. By utilizing zero-knowledge proofs, it ensures that transaction validation is performed without compromising the privacy or security of information. - Long-Term Sustainability
By reducing the load on the main network and decreasing gas fees, New Horizen contributes to the long-term sustainability of Horizen. It facilitates a more balanced and sustainable economic model for node operators, developers, and users, ensuring that growth and scaling can continue efficiently in the future.
These advancements are essential for the future of the decentralized finance (DeFi) space and the ongoing development of the blockchain ecosystem.
Conclusion
With the implementation of New Horizen, we stand on the threshold of a new era in the evolution of blockchain technology. This bold step forward not only marks a milestone in the search for innovative solutions to scalability and efficiency challenges but also represents an unwavering commitment to creating a more inclusive and sustainable future for all.
This new paradigm in blockchain architecture not only enhances accessibility and affordability but also fosters innovation and collaboration across the ecosystem.
By embracing this visionary approach, Horizen positions itself at the forefront of the technological revolution, moving towards a future where decentralization, security, and efficiency become tangible realities, shaping a tomorrow where everyone can reach their fullest potential in a truly global ecosystem, a real web3.
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